US semiconductor stocks rose in premarket trading on Tuesday after the Biden administration launched a new trade investigation into Chinese-made legacy semiconductors. The probe, under Section 301 of the Trade Act of 1974, aims to protect US market competition and safeguard against China’s artificially low-priced chips.
Companies such as Broadcom, AMD, Marvell Technology, and Micron posted gains of 1.8%, 1.8%, 0.4%, and 0.1%, respectively. ETFs tracking the sector also saw increases of 0.3% and 0.2%.
The move is seen as a response to China’s state-driven expansion of its chip industry, which has enabled Chinese companies to dominate global markets. US Trade Representative Katherine Tai stated that the probe will safeguard US market competition.
However, the investigation could lead to new tariffs on Chinese semiconductors, adding to existing 50% tariff scheduled for January 1. China’s commerce ministry expressed concerns about potential disruptions to global chip supply chains.
The probe will be completed under President-elect Donald Trump’s administration, but the Biden administration’s decision may result in additional tariffs on Chinese semiconductors.
Source: https://finance.yahoo.com/news/biden-administration-announces-chinese-chips-120445976.html